The state spent all of its revenue on salaries and pensions in FY20 | Jaipur News
Jaipur: The state government spent 109.54% of its total revenue in 2019-2020 on essential expenses such as wages and salaries (35.02%), pensions (14.82%), subsidies and grants to various institutions (42.83%). For the development work, she had to borrow money, the limit of which is increasing year by year.
According to a communication from the Ministry of Finance to the Sixth State Finance Committee, total state expenditure fell from Rs 1.16 lakh crore in 2014-15 to Rs lakh 2.13 crore in 2019-20. On the other hand, state tax revenue has increased from Rs 91,326 crore in 2014-15 to Rs 1.40 lakh crore in 2019-20. This reveals that the growth in total expenditure is 83% while the growth in tax revenue has remained at 53%. Income expenses, which are incurred by nature and cannot be deferred as they constitute salaries, pension, etc., have increased from Rs 94,591 crore in 2014-15 to Rs 1.76 lakh crore in 2019-20, registering an increase of Rs 87%, far exceeding tax revenue.
In the absence of new investments and an improvement in economic activity, the growth in tax revenue declined from Rs 16.77% in 2017-18 to 1.63% in 2019-20.
The additional burden has also come from the increased allocation of funds to centrally sponsored schemes. Previously, the Center funded 100% or a 75:25 ratio in the plans. Now the Center has reduced its contribution, forcing the state to pay 50 or 40% of the funds into the schemes. Likewise, the Center has also restructured programs like Pradhanmatri Awas Yojna where states are required to share an additional financial burden.
Doubling the annual social security pension expenditure in 2019-20 compared to 2015-16 and interest charges of Rs 5,000 crore per year in service, the debt of the discoms are other heads that have increased the state debt.
Before the pandemic hit the country in March 2020, the fiscal situation was already in dire straits and now it has worsened. In addition, investments and economic activities that increase government tax revenues have remained stagnant due to almost no significant new investment in the state.